FTSE 100 Forecast Today 21/01: FTSE 100 Shows Signs

(MENAFN- Daily Forex)

• The FTSE 100 has been slightly positive during the trading session on Monday, as we broke above the crucial 8500 level, but it's also worth noting that we are a little overextended. In fact, on the chart, I have put up the stochastic oscillator, which is in the overbought condition and starting to cross over.
• So, I think we've got a situation where we may need to pull back a little bit in order to offer enough value. The 8,400 level underneath could be an area where traders get involved. And then again, at the 50 day EMA. Quite frankly, this is a market that has been consolidating since May of 2024. And therefore, I think we've got a situation where now that we have expended the energy to bust through the ceiling, traders will be looking to take advantage of cheap contracts on a pullback. If we do just turn around and break above the top of the Monday session, then the market's likely to go looking to the 8600 level. I do think that we've got more upward momentum here, but at this point in time, I think we're just a little overdone.

I am Still Bullish Overall, Despite a Bit of Gravity

I like the idea of owning this index because quite frankly, most indices around the world continue to rally. This is based mainly on the idea that central banks around the world are more likely than not going to continue to ease monetary policy, and London probably won't be any different. If we continue to see inflation and growth in various countries at the same time, that a lot of times will lift stocks as well. So that's something to keep an eye on in the United Kingdom, but regardless, I think this is a buy on the dip opportunity just waiting to happen.

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